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Economy in Brief

U.S. Consumer Credit Outstanding Is Off Again
by Tom Moeller August 06, 2010

Consumers still are shying away from carrying credit balances. At least they're looking to lower the balances they have. Consumer credit outstanding fell $1.3B during June after a $5.3B May decline that was smaller than reported initially. The latest was the fifth consecutive monthly decline and, coupled with larger drops late last year, the 3.5% y/y decline remained near a record.

Again, leading the decline was a $4.5B drop in revolving credit outstanding. Consumers still seem to be just cutting up their credit cards. The 9.4% y/y decline in credit outstanding was near the record for a series that never went negative before last year. Pools of securitized assets remained down and were near a fifth of their peak while finance company lending again held roughly constant (+32.4% y/y). Commercial bank lending fell for the third straight month after a surge during March. Loans from credit unions were roughly stable (+4.2% y/y) as was lending by savings institutions (+16.5 y/y).

Usage of non-revolving credit (autos & other consumer durables), which accounts for nearly two-thirds of the total, rose for the second straight month. The $3.2B monthly increase was the fourth this year and lessened the y/y decline to 0.1% after a 1.3% drop last year. The monthly gain was led by a $5.5B increase in loans from the Federal Government, up by nearly two-thirds y/y. Finance company lending slipped $0.1B (-2.9% y/y) and credit union lending fell $1.0B (-3.9% y/y). Commercial bank lending slipped $0.1B (+6.5% y/y). 

During the last ten years, there has been a 60% correlation between the y/y change in credit outstanding and the change in personal consumption expenditures.  Moreover, these figures are the major input to the Fed's quarterly Flow of Funds accounts for the household sector.

Credit data are available in Haver's USECON database. The Flow of Funds data are in Haver's FFUNDS database

Consumer Credit Outstanding
(m/m Chg, SAAR)
June May April Y/Y 2009 2008 2007
Total $-1.3B $-5.3B $-14.2B -3.5% -4.4% 1.5% 5.7%
   Revolving -4.5 -7.1 -8.4 -9.4 -9.6 1.6 8.1
   Non-revolving 3.2 1.8 -5.8 -0.1 -1.3 1.5 4.4
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